From Obscurity To Menace: Sorting Through The Internet Of Things

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Sarah Cohen, Contributor

February 3, 2014

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It’s easy to get lost in technology jargon. So much of it means nothing or something arcane.

I never heard of the term “Internet of Things,” or “IoT,” until stumbling upon stories out of the Consumer Electronics Show last month, though I’d known of the phenomenon for 20 years. I walked through an Epcot Center exhibit in 1994 about what to expect from the home of the future – houses with heating systems people can adjust at work and toaster ovens they can program to make eggs at a set time even if away.

Today, people still prefer to make eggs themselves and turn up heaters when cold in the house. IoT stood for decades as technology with potential but little else.

Greg Duffy, the CEO of Dropcam, which sells a video monitoring service that enables users to see and interact with people in remote locations, said his company had a hard time attracting financing when launched in 2009. “Everybody thought the connected home was lame… about light switches, pots of coffee and toasters.” The idea also attracted little applause if Duffy mentioned IoT at public events. “I’d hear crickets.”

Nevertheless, Dropcam has since experienced 500% growth and received $50 million in funding, said Duffy. Instead of asking audiences their impressions of IoT, Duffy asks about particular startups and products to get a positive reaction. “Do you use Dropcam, Nest or Sonos?”

Big companies that have yet to formulate strategies for IoT received their “first shot across the bow” three weeks ago when Google announced it would acquire Nest, a maker of WiFi connected thermostats, last month for $3.2 billion, said Duffy.

Still, exactly how IoT affects companies and consumers remains “scary,” said Pedro Pavon, an associate at law firm Carlton Fields Jorden Burt. “There will be a lot less privacy inside your home.”

The Internet is scary enough. A nirvana for sociopaths, all it takes is a hacker and someone with malicious intent to access personal information and buy goods with someone else’s funds; post embarrassing videos online; harass coworkers without them knowing who did what; spy on foreign nations.

Pavon is a proponent of IoT when balanced with privacy and security risks, he said, but warned that criminal activity will increase 10-fold when alarm systems are hacked; when stalkers can tell you’re in or out of the house because of the dish washer. Thieves are already breaking into cars by using hand-held devices. Pavon noted too that the first incident of a household appliance, a refrigerator, sending spam occurred two weeks ago.

Who will bear responsibility for IoT-related criminal activity remains unknown, noted Pavon. “Laws that affect companies and consumers will evolve over the next few years. Then there’s the question of who owns data. Google knows a lot about you right now. How is Google going to use the data when it has access to how often you run a load of laundry?” Nobody knows how health care information will be mishandled. Nobody knows to what degree privacy and safety laws will be local or federal. “I’ll be busy,” said Pavon.

The technology surrounding IoT is as nebulous as the law. Companies have yet to standardize on a network protocol, noted Martin Horne, CEO of LiveQoS, which sells network monitoring products. Right now, connected devices run over ZigBee, Z-Wave, BlueTooth, RFID and MiWi, none of which communicate with the other. Over time, a technology that unites them will emerge.

Then a technology that prioritizes applications will need to be developed, Horne postulated. For instance, when a consumer’s dish washer is overflowing, he probably doesn’t want notifications from his toaster.

Gartner has developed a framework for expectations in the IoT age. Four types of companies will play in the sector, said Hung LeHong, VP and Gartner fellow. Some will optimize products to leverage the capabilities of the connected Internet; for example, General Electric has retrofitted gas turbines with sensors to “tweak nobs and save fuel.” Some will find ways to charge consumers on a per use basis. Some will control devices, for instance, remotely unlock cars or shut vales. Some will extend services, like streaming media, into new territories.

It’s sensible to assume consumer-facing companies like Google, Apple and Microsoft will continue to face the consumer; and enterprise-facing companies like IBM and Siemens will offer products and services to business, said LeHong. Chipmakers like Intel, Freescale and Qualcomm are already excited about the potential for sensors, chips that assess and respond to the physical environment.

My expectation is I’ll continue to leave my eggs in the fridge until I’m ready to eat.